International Eurasian Institute for Economic and Political Research


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A . Kazhegeldin - International Eurasian Institute for Economic and Political ResearchThe end of the “controlled” democracy
Akezhan Kazhegeldin: “Our elite is too timid with respect to “Kazakhgate”


According to the established tradition, on the eve of a New Year one sums up the past year and make predictions for the year to come. To certain extent, this interview with former Kazakh prime minister Akezhan KAZHEGELDIN is a summarizing one: our interlocutor sums up and evaluates what happened to him and to Kazakhstan almost a decade ago. At the same time, he attempts to make a forecast for the future as he urges his “comrades-in-arms” not to let things slide in the intensively developing political process in Kazakhstan. Being away from home, one is clearly unable to evaluate the happenings inside Kazakhstan at first hand. However, not for nothing they say that with distance comes perspective…

So, how the Kazakh events are seen from the far away where opposition member No. 1 lives today?

Akezhan Magzhanovich, Kazakh officials love to say that all prominent opposition members have become Nazarbayev's opponents only because they were ousted from office or they had no prospects there... You were the first to leave. Tell me frankly, why?

- First, I would like to comment a bit on the way the question is formulated. When one asks to “tell frankly”, it's implied that on other occasions the interlocutor speaks “not frankly”. Why? When one says that “all opposition members have become opponents because they were ousted out” and so on, the question arises: who thinks so? Is it your editorial office, your publishers or readers? I hope, not. Perhaps, it is the honest and patriotically minded citizens of Kazakhstan? I am positive they think quite differently.

Only scoundrels, dreaming of top government posts in order to cling to them indefinitely, are able to suspect profit motives in the actions of government officials who have left their high-ranking posts to join the opposition to find themselves in jail or exiled. All those who once led the government, parliament or were governors and ministers know the price of power. We know what needs to be done for our state, how to change the life of the people for the better. And we see quite well why those efforts prove fruitless under the current political regime.

Back in 1997, I faced a challenge: whether to close my eyes to the system of stealing oil revenues being established under Games Giffen's supervision or to speak out in protest. I opted for the second and suggested that Nazarbayev choose between Giffen and me. He chose Giffen. Later, Nazarbayev complained he had made a mistake.

Couldn't you, like Tereshchenko, just quietly do your business instead? Or to “sit it out” like Tasmagambetov did? Perhaps, in a couple of years you could have been “be in the saddle” again?

- “To be a saddle” is a relative notion. I don't feel like “quietly doing my business” either. To say nothing of “sitting out.” After my resignation, I wrote critical articles and two books: “The Right to Choose” and “Opposition to the Dark Ages”, developed draft changes to the Constitution and the Election Law, fought for my right to participate in the 1999 presidential and parliamentary elections, set up the Republican People's Party and the Forum of Democratic Forces, and represented Kazakh democratic movement in many renowned international institutions and groups... Let's our readers decide for themselves whether I should I envy the fate of Tereshchenko or Tasmagambetov or not.

As to the chance to hold the office of prime minister once again, there were such opportunities. Once, Games Giffen offered this post to me in writing. Imagine the way things stood in Kazakhstan if a foreign swindler offers the position of prime minister on behalf of the President! The original of Giffen's letter with this “indecent proposal” will appear in the Kazakhgate trial.


Your name and the name of Nazarbayev are linked to the privatization. How could it happen that the President's relatives and close to him investors got hold of the tidbits?

- According to your logic, if my and the President's names are linked to the privatization alike, much of the “tidbits” must have ended up in the hands of my relatives or investors close to me. None of my relatives are among those who have privatized a thing in Kazakhstan. Similarly, one could hardly name such investors. I haven't got an apartment in Kazakhstan, to say nothing of a company or a house.

Speaking not about me but about current situation in the Kazakh economy, there are two reasons for all what has happened. First, it has happened because of refusing the system of open tenders and investment contests under the control of respectable international legal firms. Adviser Games Giffen sought to indispose Nazarbayev against such contests, while our cabinet sought to conduct them instead.

The second reason is the refusal to develop stock market and attract pension funds to it. Our cabinet saw it as a tool to nurture a strong national investor able to control copper, zinc, and aluminum industries. But one is unable to tell the stock market to pay 10-20% to President's personal accounts or to make scores of stockholders raise funds for his secret election fund.

However, this aim could be easily achieved if you deal with shady semi-foreign investors. They are ready to pay “kickbacks” to any officials as they realize that their assets are insecure and illegal. They need many patrons in the person of heads of regional administrations, ministers, premiers, the President and his associates.

Mashkevich had emerged in Kazakhstan before you become prime minister. However, you have surely met with him, haven't you? Could you evaluate the role he plays under the Nazarbayev regime?

- Sure, I know Alexander Mashkevich and his partners in the Eurasia Group. When I held office, they were managers, while real masters of the funds were behind them. There must be a National Security Committee's note left in achieves of the state privatization committee detailing the sources of capital. Later, there emerged a conflict among them, and the Kazakh Supreme Court supported Mashkevich, Shodiev, and Ibragimov.

I closely follow the Respublika's publications on the Eurasia Group. You appear to realize quite well Alexander Antonovich's role among Nursultan Abishevich's allies. As the Germans say, “madchen fur alles”. It stands for “a girl for any occasion” who helps in the entire house. It's very convenient to have such a help, especially as the help pays for the host's whims, like setting up a party or sponsoring a holiday trip...

In 1997, our government managed to have balance sheets published of all the companies with a government share. In one of such companies, part of the Eurasia Group, a $200 mln. imbalance was detected. This sparked a crisis, the company's owners turned to the President for help, and the latter actively intervened... So, it became clear who was the “silent co-owner” of the concern in question.

Subsequently, the Eurasia Group has continued to secretly receive state-run assets without any tenders guaranteed only by the group's promises of new investments... New Kazakh leaders would have to untie this knot. In doing so, it would be crucial not only to respect the law, but also to assert the Kazakh national business interests.

Recently, members of the Eurasia Group have promised the President that they hush up the Kazakhgate investigation through their ethnic contacts in the U.S. They have tried to do so, but to no avail. Unlike Kazakhstan, western justice is independent, and no one among serious people would run the risk of standing trial for obstructing justice.

At the same time, one should not overestimate the influence of Mashevich or any other oligarchs on Nazarbayev. The President is by no means a puppet. He uses his “tame” investors at his own discretion. He participates in their business, on the one hand, as a secret partner, and as a super-cover, on the other hand. Nazarbayev's influence on such “investors” stems from the insecurity of their assets in Kazakhstan: there were no tenders held or contracts published, and their balances are shady... These are ideal conditions for racketeering and corruption.

Judging by publications in the press, interest to the Eurasia Group leaders has been growing. Belgian, Swiss, and British authorities have been investigating the matter. If your readers take interest, the Respublika should send there reporters to meet with their colleagues and exchange information.

Many believe that it were Tasmagambetov and Mashkevich, not the Otan and AIST parties, who won recent parliamentary elections. Do you agree with it?

- Internationally, not only robbery is considered a crime, but also dealing in and making use of stolen property. Millions of votes have been stolen, and Otan, AIST and Asar deputies use them illegally. Mashkevich, Tasmagambetov, Baliyeva and Nazarbayev may regard this a victory, but the saying “success is never blamed” does not work here. Victors are judged. Just look at their colleagues in Serbia, Ukraine or Georgia.

Zharmakhan Tuyakbay was reluctant to use stolen votes and refused his seat. As a lawyer, he sees the future of this parliament better that anyone else.

However, the importance of the recent election to Majilis is paramount. I say this without any irony at all. The election has drawn a line under the era of the “controlled democracy.” From now on, this road would lead to nowhere. Perhaps, if one just rank the President's guardsmen, order them to number in turn and appoint first 77 guardsmen Majilis deputues.

As a result, the society hasn't recognized the parliament as legitimate. In case of a potential crisis during the presidential elections the parliament's decisions would be revoked by direct declaration of popular will. In the first place, it concerns any changes to the Constitution or attempts to elect the President by the parliament. Any cooperative has more powers to take decisions that the current Majilis.


You must know James Giffen very well as you have participated in selling out oil fields. Do you believe that he really is a CIA agent? Or he is just a middleman, while Nazarbayev is responsible for all uncovered in the Kazakhgate trial?

- The question is put is a dubious manner. Just imagine someone asks you: “You must have known well the circumstances accompanying the arson attack on the Respublika editorial office as you set it on fire”... However, the essence of the question deserves a serious talk.

In 1995-97, licenses to produce oil were granted exclusively through investment tenders overseen by international legal companies. The contracts investigated in the Kazakhgate trial, first of all regarding the Tengiz, Kashagan, and Karachaganak fields and the Caspian Pipeline Consortium, were reached by the President prior or after my term in office as prime minister. In all the cases, Nurlan Balgimbayev knows about them as much as Nazarbayev does.

By that time, Giffen had already met with Nazarbayev?

- James Giffen made friends with Nazarbayev in the Soviet-era times. Their relationship appear to be far from being terminated, judging by the way the President stands up for the defendant. Nazarbayev has confided recently to me that those “friendship” and “business” were a huge mistake though.

Our government literally clashed with James Giffen's “activities”. Those clashes occurred one after another. In 1996-97, when preparing privatization decisions on Mangystaumunaigaz, Yuzhneftegaz, Aktobemunaigaz and other oilfields, we declined Mercator's proposals basing on the assessments made by international experts. There exist minutes of the cabinet sessions, as well as recommendations of the interdepartmental privatization commission.

Giffen as a phenomenon is dangerous not because of his avarice. This is quite typical for businessmen who set off to the “third world” states in quest of happiness. They do not produce or invest anything, they just specialize in “services” to beginner rulers. I presume, Giffen has corrupted Nazarbayev by promising him absolute confidentiality and impunity.

At a certain moment, James Giffen imagined himself not a handy man, but the authority itself. He corrupted scores of officials among the Nazarbayev entourage, engaged force departments to fight international advisers to the government. In 1997-98, tax police with personal participation of Rakhat Aliev together with the investigative committee conducted searches and arrests in the offices of western legal firms in Almaty. As a result, they all withdrew from there. Giffen was the only left and enjoyed broad powers. To find support with the President administration, General Prosecutor's Office and other government bodies was exceptionally easy for him.

The idea to set up Kazakhoil company instead of the oil and gas ministry and to liquidate the geology ministry belongs to James Giffen. He sought to take the industry from under government's control, and Nazarbayev let his friend and adviser push him around.

And what is your personal position?

- I did not want to “preside over” misappropriation of national resources. I told Nazarbayev about that when I tendered my resignation. I hoped that my resignation would help bring the President to reason and give him an impetus to wake up. I know Giffen personally and can assure you that he has done nothing useful to our state, but inflicted great damage instead. All the talk that he has brought investors tо Kazakhstan is sheer nonsense. Other states across the globe produce oil without Giffen and succeed in this just as well. There have been scores of those willing to invest in Kazakhstan.

Representatives of leading oil companies visited our waiting rooms. Giffen's avidity scared off many of them. Those who agreed to play by his rules, found themselves on trial or behind the bars because of him. His partner Brian Williams, vice president of Mobil, was sentenced to almost five years in jail. The turn of other manages involved in the bribery will come after the New York trial is over.

And still, was Giffen a CIA agent?

- This will come to light very soon. The U.S. Justice Department does not deny the fact that he delivered secret information from Nazarbayev’s desk to the U.S. government. Was he authorized to make Nazarbayev follow a certain political line, that is an interesting question.


It is rumored that the money from the sale of Kazakh companies’ shares and assets was transferred to government’s secret accounts that had existed before Kazakhstan sold a 25% share in TengizChevroil to Mobil. It is also said that there is your signature on the secret government’s resolutions. Is thas true?

-My information differs with yours. When I was a prime minister, the government didn’t open any secret accounts to accumulate proceeds from selling Kazakh shares and assets. The money for the state share from the deal with Mobil was transferred to the official account of the Republic of Kazakhstan Treasury. The matter is that the amount that arrived to this account was significantly less than that under the contract. However, this was uncovered only during the investigation into the “Kazakhgate”.

No secret resolutions were ever taken during my term in office. Please note that even Imangali Tasmagambetov didn’t manage to mention the Kazhegeldin cabinet in his story about how heroically Nazarbayev had been hiding money in his private accounts in Credit Agricol Indosuez. Government’s accounts were opened to collect money from the commercial activity of state bodies, and spending this money was permitted exclusively for the national needs which was meticulously recorder in official documents. This is easy to check even if the government archives were destroyed during the move to Astana. It is a bureaucratic rule of thumb that the copies do not burn.

And those accounts have never been opened in Credit Agricol Indosuez. They were liquidated in full compliance with the law. The moneys went to the budget revenues.

You are familiar with many secrets of power. It is rumored that the $0.75 that Giffen get from every ton of Tengiz oil goes to secret foreign accounts. Is that true?

- I have got no reliable information on this issue. For the first time, I saw Kazakhstan’s contract with Chevron in 2003. The reporters showed it to me in America. Our government has not seen the document. I can give a copy to Kazakh journalists and politicians who are willing to study the case. It looks like Giffen was giving a major part of his commission for Tengiz to someone. Otherwise his assets would be much higher. The transactions have not been traced yet at the Swiss banks where main accounts of the Kazakhgate accomplices were seized. The court may judge to forfeiture Giffen’s property. Then we will see.

Will you participate in the Kazakhgate trial and in which capacity – as a witness or an observer?

- Participation in the trial is my civil duty as an opposition politician and a top government official. I don’t know whether the U.S. court will need my testimony. In any case I will insist that the money seized on the accounts of Giffen, Nazarbayev, Balgimbayev and their families be returned to Kazakhstan.

It is a question still in which form this should be accomplished. I suggest that opposition leaders develop a procedure for the U.S. and Swiss governments to transfer the huge sums to be used to the good of the nation and to prevent them from getting back to the same people on the top. This is the subject to be discussed with U.S. congressmen, Swiss MPs, lawyers, international organizations fighting against government corruption.

Our elite’s attitude towards Kazakhgate is rather timid. The scandal has been developing for several years, and nothing has been done yet to get the money back to the country. I think, a national public commission on this matter should be established. I would suggest that Zamanbek Nurkandilov be its chair. With his courage and openness he has gained confidence of the nation and no one would say he plays up to Nazarbayev and helps him to shirk responsibility.


It is rumored that Nazarbayev has constantly been sending his agents to you proposing to come to an agreement. Among them Rakhat Aliev, Dariga Nazarbayeva, Bulat Utermuratov, Nurtay Abykayev and others are named. Have any meetings taken place?

- Yes, there are such rumors. One rumor is spread by the Respublika: that I had a meeting with Rakhat Aliev in Vienna. Maybe, Aliev himself told you about this? Please don’t believe him. As a presidential representative he came to visit me in London, as far as I remember, in 2001. He represents nobody today. We would have had nothing to discuss. He and his spouse have to take care of their own future. By the way, Dariga Nazarbayeva also came to London. A group of British MPs acted as intermediaries then. I have had other contacts, at a much more serious level.

What did you suggest?

- I think, it is more interesting what I suggested to them rather than what they were suggesting. Invariably, for any agreement with the authority, I put forward the condition to revoke every politically motivated sentence, release and rehabilitate the convicted politicians and journalists, to conduct truly democratic reforms. At my recent meeting with the leaders of opposition parties I answered their questions on the talks I had had.

What is your forecast for the next several years? When and how Nazarbayev will resign? Who will be his successor?

- Nazarbayev will not have a successor. Any new leader will be building his policy based on criticism of his predecessor and criminal prosecution of his henchmen. Nazarbayev is quite aware of this, and will not step down voluntarily. The Azeri pattern is a peculiar one as the succession was accomplished almost from the dead. Heidar Aliev had nothing to fear anymore. Yanukovich's experience teaches us in what manner a potential successor may behave towards his benefactor. Anyone who will be pledging allegiance to Nazarbayev will face public discontent and seek to put the blame on to Nazarbayev. The change of the political system is inevitable in Kazakhstan. “The managed democracy” has achieved the bottom in its fall.

It's not clear yet whether the revolution will take place in the Republic Square or in the Nazarbayev’s residence in Astana. I don’t believe in the possibility for today’s government to ensure a smooth reform. Unfortunately, there will be large-scale falsification and outrage, the attempts will be made to cling to power for another decade, to silence the media and crack down on opposition members. In response, the opposition would bring 100,000 people into the streets.

The regime won't survive, which is obvious. The army will not turn its arms against the people. In such cases, secret services are very cautious. Kiev and Tbilisi experiences prove this. And the Kazakhs have got the wealth of experience of mass discontent. The former regime would only have to hope for the nation’s wisdom and big heart.

The opposition parties should be prepared for such turn of events. We need to urgently unite our forces, to nominate our single presidential candidate, to develop a general program for immediate reform. We, leaders of democratic forces, should speak today not of a forecast but a plan of developments. And not for years to come but for months and even weeks.

“Respublika”, December 24, 2004


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